US, Temu bans shipments from China - Elimination of the "de minimis" rule changes the platform's strategy
Chinese low-cost retailer Temu changed its business model in the US as the Trump administration's new rules on low-value shipments took effect.
In recent days, Temu has suddenly changed its website and app to only display product listings shipped from U.S.-based warehouses. Items shipped directly from China, which previously covered the site, are now labeled as unavailable.
Temu became famous in the US as a destination for deeply discounted items shipped directly from China. The platform has been able to keep prices low because of the so-called “de minimis” rule, under which items worth $800 or less have entered the country duty-free since 2016.
The rule expired on Friday as a result of an executive order signed by President Donald Trump in April. The US president briefly suspended the “de minimis” rule in February before reinstating the provision a few days later, as customs officials had to process and collect tariffs on many low-value packages.
The end of the "de minimis" rule, as well as Trump's new 145% tariffs on China, have forced Temu to raise prices, suspend its aggressive online advertising push, and now change the selection of goods available to American shoppers to circumvent the higher taxes.
A Temu spokesperson confirmed that all U.S. sales are now handled by local sellers and said they are fulfilled "from within the country." Temu said prices for U.S. buyers "remain unchanged."
Before the change, shoppers trying to purchase Temu products shipped from China faced “import tariffs” of between 130% and 150%. The tariffs often cost more than the individual item and more than double the price of multiple orders.
Temu advertises that its domestic products have "no import tariffs" or "additional fees upon delivery." The company, which is owned by Chinese e-commerce giant PDD Holdings, has been gradually building up its inventory in the US over the past year in anticipation of escalating trade tensions and the removal of de minimis.
Many third-party sellers on Amazon rely on Chinese manufacturers to supply or assemble their products. Temu's competitor, called Amazon Haul, has relied on the "de minimis" rule to ship products priced $20 or less directly from China to the US.
Amazon said after a clash with the White House that it had considered showing the costs associated with fees for Haul products before the de minimis limitation, but had since abandoned those plans.
Before Trump's second term in office, the Biden administration had also sought to limit the provision. Critics of the "de minimis" provision argue that it harms American businesses and facilitates shipments of fentanyl and other illegal substances because, they say, the packages are less likely to be inspected by customs agents.
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